Pittsburgh

Super Bowl XLV: The $10 Billion Bag of Chips

Matthew Stevenson — Sat, 05 Feb 2011 12:27:32 -0500

I am raining on the big parade by equating the Super Bowl with trade deficits, budget shortfalls, state bonds on the edge of default, and unemployment close to ten percent. But if thirty-second ads that cost $2.7 million or The Black Eyed Peas at halftime can’t lift the economy out of its doldrums, how can we expect the same miracles from Troy Polamalu or Aaron Rodgers?

From the perch of anyone staring at a TV or looking down from a skybox, what industry could be more bullish for America than the National Football League? Revenue for this year will top out between eight and nine billion dollars, which is roughly shared among the thirty-two professional teams. Does it not speak of economic recovery when even the fan-owned Green Bay Packers, with their retro stadium and rust-belt market, are given a market valuation in Forbes Magazine at more than $1 billion?

How can it be fourth-and-long for America if, at the Super Bowl, tickets on the thirty yard line cost $10,366? Or if half of a sky box is fetching $384,993 at the Dallas stadium, which itself cost $1.5 billion to build?

For the partners in what Theodore Roosevelt might have called “the football trust,” the economics of the game puts every NFL team owner in the Super Bowl. That the Buffalo Bills chose to pocket their subsidies instead of investing in a quarterback who didn’t graduate from Harvard is their business, and a good one at that. In 2009, they earned $28 million while the New York Giants, fresh from a Super Bowl win, only made $2 million.

A closer look at football economics, however, makes the touchdown business a perfect metaphor for an industry—not unlike the nation—that talks up competition, “good conduct”, fair play, and free enterprise, but then goes to the subprime bank with hand-offs from sweetheart contracts, congressional subsidies, tax breaks, restrictive labor agreements, and underwater municipal bonds.

Twenty-eight of the thirty-two NFL stadiums were financed with some public money, and eleven were built entirely on the dole. The NFL has enjoyed something like $10 billion in stadium subsidies in recent years. I wonder how many depleted state and city governments (Cincinnati gave the Bengals $450 million for their stadium) wish that a financial booth review could challenge the ruling on the field. As China built steel mills and high-speed rail, American cities went with skyboxes and entertainment venues that are used on about twelve days a year.

The MVP of subsidies for the NFL is its antitrust exemption, which limits the number of teams at the professional level. Were free enterprise to govern the sport, instead of a medieval guild, anyone could put together a club.

The NFL would simply be the best thirty-two teams in any given year. Teams that were improving would move up; bad teams, like the Browns, would be relegated to lesser leagues. Golf is played by this principle. Every town and city in America could compete.

With Congress stuffing the competition at the line, the NFL enjoys a football monopoly, which allows it to dictate the prices of everything from official jerseys to cable subscriptions. “You want the NFL?....Go to the NFL...with about ten grand for an upper deck seat.”

To be sure, the NFL has an engaging product and, if you can sit through the hours of time-outs and commercials, even some exciting games. But given that football is staged to sell things, what trots out on the field at the Super Bowl has more in common with billboards or beach banners than with sport.

The advertisers at this year’s Super Bowl, paying $90,000 a second, include Volkswagen, Bud Light, Cars.com, Mars, Pepsi, Pizza Hut, CareerBuilder, Coca-Cola, and no doubt the knowing leer of the Viagra man, looking over his wife as if she were a Dallas Cowboys cheerleader.

Their products will be seen in forty-eight million homes and by almost 100 million Americans. Fifty million Americans, myself among them, watched the first Super Bowl in 1967, in which a hung-over Max McGee twice took it to the house against the Kansas City Chiefs. The networks thought so little of the spectacle that no videotape of the game remains.

The Super Bowl is a windfall for caterers, pizza joints that deliver, beer distributors, and guacamole middle men, not to mention the Dallas escorts who are charging $24,000 for a week of bump-and-run. But does it not also suggest a spectator nation, day dreaming about cars, sex, and getting a job?

Under the current NFL contract, which expires March 3, the salary cap for each team is between 56 and 60 percent of the league’s revenues. The fans are told that the cap is to insure parity in the league, so that on any give Sunday the Panthers might not lose by more than twenty points. The salary cap also keeps the word "free" out of the enterprise, and fixes the game to insure a profit for every team owner (except maybe the Lions).

Few NFL player contracts have much in the way of long-term financial guarantees, and teams can cut veterans, even those who have sustained serious injuries, to clear “space” from their cap.

Very much in the spirit of earlier monopolists, NFL owners are not content with their billion dollar team valuations, subsidized stadiums, cozy TV contracts, and parking lot rebates.

Now owners are asking the players' association to accept an 18 percent pay cut in the next Collective Bargaining Agreement. Among the owners’ negotiating demands are a reduction in player salaries, especially for rookies, and an addition of two more games to the schedule.

Owners are threatening to lockout the players (as if they were Pullman workers) and suspend football for next year. Or the games could be played with scabs, as happened in 1987. Shutdown losses would run into the billions.

Fans can only hope that Taft-Hartley would be invoked to keep the Oakland Raiders on the field, or that President Obama would pass a Football Recovery and Mall Consumption Act to rush stimulus money into the red zone.

After such a diatribe, will I be watching Super Bowl XLV? Of course I will. From the first Super Bowl (which was really an exhibition game at which tickets were $12) onward, I have seen some or all of the other forty-three games. Along with cheering McGee, I have seen the Packers’ Donny Anderson knock out the Chiefs’ Fred Williamson (aka “The Hammer”), the reigns of Terry Bradshaw and Joe Montana, and even those four terrible Super Bowls that the Buffalo Bills lost in a row.

As a fan of the New York Jets, I remember Super Bowl III more clearly than some others. (As Joe Namath said, “I never drink at halftime.”) But I know where I was when the “Refrigerator” (William Perry) scored in Super Bowl XX, and I cannot read anything about Armenia without thinking about Miami Dolphin kicker Garo Yepremian and that absurd pass.

Despite my institutional memory for the Super Bowl, I wonder whether it makes sense to elevate a sporting event into a national consumer revival meeting (“brought to you by Cialis...when shopping isn’t enough”). Nor do I think that the hoopla fulfills Vince Lombardi’s dreams, unless they involved Janet Jackson.

Although he wasn’t speaking about economic competitiveness, former Washington Redskin and current TV announcer Joe Theismann revealed a truth about the big game when he said, “Nobody in football should be called a genius. A genius is a guy like Norman Einstein.”

Photo by americanistadechiapas

Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper's Magazine.

Forged in Pittsburgh: The Football Industry & The Steelers

Matthew Stevenson — Tue, 25 Jan 2011 17:47:28 -0500

When will the Labor Department come up with a statistic (GEP or Gross Entertainment Product) to measure to extent to which the economy is dependent on fun? The Pittsburgh Steelers are, at the very least, the emotional heart of Pittsburgh. In season on Sundays, the faithful wear their jerseys to church, and the city takes a reverential pause during the games, as it did during last Sunday’s AFC championship competition. Football wins in Pittsburgh are best understood as divine rapture, delivered by Steelers quarterback Ben Roethlisberger, despite his pre-season time in purgatory.

The football industry has its factory lines across the river from downtown Pittsburgh. A joint venture between the Pittsburgh Steelers, the University of Pittsburgh, and local government accounted for the financial package that replaced Three Rivers Stadium with Heinz Field, a hulking monolith that, instead of producing steel by night, hosts football games on about twenty days a year.

At the same time, the city replaced the baseball stadium and added on to the convention center, for a total expenditure of $809 million. Costs allocated to Heinz Field are estimated to be $281 million, although the accounting is more impenetrable than the Steel Curtain.

Why would a city struggling to replace jobs lost to Asia put millions into two stadiums that are little more productive than Crusader fortresses in the Levant?

Some answers might be found in the Obama appointment of the Steelers’ owner, Dan Rooney, as U.S. ambassador to Ireland. Presumably, Rooney and some local unions had delivered Pennsylvania to the Democrats over the course of many elections, and their reward was a sweetheart contract to build a football stadium and an ambassadorship.

The arrangement casts professional football in the guise of a protected guild, although perhaps one as vulnerable as steel tubing is to competitive destruction.

Were professional football not to enjoy an antitrust exemption, the Koreans and the Chinese might be supplying games for costs far less than those requiring a publicly funded stadium ($158 million directly) in which the Rooneys pocket the $125,000 per year from each of the high-end sky boxes.

The first time I went to Pittsburgh, in 1972, I came up the Ohio Valley on a series of buses that stopped in places like Moundsville, Wheeling, Steubenville, and Weirton. Pittsburgh was an iron and steel city, although the London fog of soot no longer hung over the downtown. Still, it looked more like the past than the future, with the riverbanks lined with rusting barges and empty steel mills as forlorn as an Edward Hopper painting. The trip came after two weeks in Appalachia, studying coal mining for a High School project, together with my friend and classmate, Kevin Glynn.

Approached from the south, Pittsburgh felt like the coal and iron ore capital of America, where train, road, and river traffic came together to form the crossroads of the carbon revolution. Opposition to cap-and-trade explains why Pennsylvania recently voted Republican.

As we made our way up the Ohio Valley, Kevin and I went by car plants, rail yards, smelters, and gas flares, which, had I known more about economics, I might have recognized as the eternal flame of industrial America. Heavy industry was then moving to the Far East, which left downtown Pittsburgh with the air of a frontier settlement in which the saloon and the company store had closed.

We stayed in a shabby hotel, went to a baseball game, and caught a night train home to New York, having liked Pittsburgh more than we expected. After the narrow valleys of West Virginia and claustrophobia of the fading coal mines, Pittsburgh had felt expansive, and the three rivers that converged off Fort Pitt suggested that the city had currents to wider worlds, as Abraham Lincoln found when he drifted from Kentucky to New Orleans.

Thirty-eight years after my first visit, I recently came back to Pittsburgh, this time on the aft, open deck of a private railroad car, as if whistle-stopping in a political campaign.

Although the private rail car offered excellent food, wine tasting, and good company, what interested me most was to see how Pittsburgh had changed since 1972. A friend who owns the car, New York Central 3, invited me to join him, and the excursion gave me the feeling that I was touring Rust Belt America in a steel gondola.

I made much of the trip west on an outdoor folding chair that gave me a box seat as the train crossed the Alleghenies and moved toward Pittsburgh through the historically drenched valleys around Conemaugh and Johnstown, site of the flood, nature’s 9/11. At each stop I wondered the extent to which Smokestack American was underwater.

In 1889 the dam of the South Fork Fishing and Hunting Club, above Johnstown, is said to have contained 20,000,000 tons of water before it broke, equivalent to the amount that goes over Niagara Falls in 36 minutes. A wind tunnel preceded the wall of water that killed 2,000. Another kind of tsunami has since swept over the modern American steel industry.

Along the banks of the Monongahela and Allegheny rivers, the Pittsburgh steel mills that once belched fire are gone, replaced by highways, empty spaces, apartment blocks, and hotels. Much of the local steel production has been outsourced to Eastern Europe, reminding me that I had seen a train emblazoned “US Steel Serbia,” on a trip to the Balkans.

The extent to which Pittsburgh has shifted into the service economy was clear, with universities, hospitals, government office buildings, and sports complexes accounting for the local growth industries.

At the Western Pennsylvania Sports Museum, I collected some notes on the extent to which football is among the region’s thriving investments. A wall map shows the location of the many local quarterbacks exported to the professional ranks. I marveled at finding names like Dan Marino, George Blanda, Joe Montana, and Jim Kelly in places that once produced things like barbed wire.

My Pittsburgh touring ended in nearby Beaver Falls, Pennsylvania, in homage to quarterback Joe Namath (of the New York Jets), who grew up on several of its gritty streets. A steel products company still operated in the town, but the mill appeared to be closed. Beaver Falls lives on the fumes of a community college and its sporting legends. In his memoirs, Namath writes that the area is “the home of more All-Americans per square mile, I’ll bet, than any other section of the country.”

I found the houses where Joe Willie grew up, including rooms over a bar & grill then called the 1223 Club, which may explain Joe’s remark that he liked his girls blond and his Johnny Walker Red. Inside the bar both are still available.

On the way back to the station, I drove past the location of Fort Pitt, the battles for which, as Fort Duquesne, had ignited the global Seven Years War (1756 - 1763) between the English and the French. A young officer, George Washington, conducted a blundering campaign against the then-French held fort, but his reputation survived.

In the 1750s, Pittsburgh was the heart of the New World, as it was later the industrial capital of an industrial nation. Today, the only wars being fought around the Ohio Valley relate to foreign trade and the Super Bowl.

Pittsburgh Steelers Photo by pitt6rng

Is Pennsylvania History?

Matthew Stevenson — Tue, 22 Jun 2010 00:00:06 -0400

On a recent whirlwind through Pennsylvania, I thought of James Carville, who popularized the notion that “It's Philadelphia on one side, Pittsburgh on the other, and Alabama in the middle.” It’s a clever line, but between the Ohio and Delaware rivers he is missing a great American tapestry: the wreck of the Penn-Central, United flight 93’s final frantic moments, the social history of the Johnstown flood, and whether a state of steel and coal is past or present.

Pennsylvania also reflects some broad truths about the nation, in particular, that stimulus plans can take forty years, the Amish have it right, the Civil War remains a personal wound, and Amtrak will never be the agent of high-speed rail.

My first stop was Harrisburg, and I got there on a train that crossed through Amish country. I would imagine that as a community the Amish have the lowest debt-to-equity ratio in the country. There is something timeless and inspiring about their red barns and silos that flickered across the train windows, and no one needs to exhort the Amish to “Go Green.”

In Harrisburg, as if a character in a novel by Theodore Dreiser, I walked with my grip from the station to a restaurant in the shadow of the state capitol. Later that evening I went to a high school graduation in the Concert Forum Hall, an elegant rotunda that was finished in the depths of the Depression.

Around the circular walls are huge maps and timelines of world history. I passed the slow moments of the ceremony following Hadrian on his way into the Syrian desert and Marco Polo to the court of the Great Khan.

Will the current stimulus money produce any buildings of such greatness? Somehow I doubt it. When the train went through Philadelphia, I saw a cheerful sign in an empty rail yard, with wording to the effect that the hot government money would get Americans back to work. The boast sounded unconvincing, as if everyone knows that stimulus money will end up funding deficits, national security advisors, and weapons contractors.

General Robert E. Lee thought so much of Harrisburg and its strategic rail bridges that twice he embarked on campaigns to cut the main line of the Pennsylvania Railroad, and twice he failed, first at Antietam and then Gettysburg. The bridges over the Susquehanna remain, and their stone arches echo Avignon. The downtown — which looks in need of some stimulus — recalls the urban loneliness of Edward Hopper.

From Harrisburg I drove west to Chambersburg and Mercersburg, strategic hamlets in the Civil War, but now a long way from the information superhighway. In 1864 Lee's general, John McCausland, burned Chambersburg to the ground when the citizens failed to post his demanded ransom, which was $100,000 in gold, or $500,000 in currency (even terrorists are leery of inflated money); later, Chambersburg was the only northern town razed during in the war.

President James Buchanan grew up in Mercersburg, a sleepy town notable today for its distinguished prep school. The log cabin in which he was born is now on the campus of Mercersburg Academy, and a nearby plaque notes that Buchanan served as U.S. Senator, ambassador to Russia and Great Britain, and Secretary of State before becoming the fifteenth president, impressive achievements for someone whose presidency is remembered as a failure, ruined by the Dred Scott decision and the drift to Civil War, which he did little to prevent.

In a more recent conflict, United flight 93 crashed west of Mercersburg, near Shanksville, which echos the lonely farmland over which so much of the Civil War was fought. Conspiracy theories (a rare American growth industry) postulate that no plane crashed at Shanksville or that the one that did was destroyed by a missile, perhaps on orders from the trigger-happy Dick Cheney. (President Bush was finishing up My Pet Goat with the school kids.) Other theories claim that engine parts were found eight miles from the crash site and no plane debris larger than small fragments were located.

A visit to the temporary Flight 93 memorial, however, puts to rest these and a number of other 9/11 conspiracy theories. About eighty percent of the plane was found at the site, although much of its was buried in the soft earth that had been strip mined; many local residents saw the plane hurtling intact toward the ground; the only debris found miles from the crash site was paper; and one of the engines flew several hundred yards — not miles — from the impact crater.

The memorial to the victims of Flight 93 is budgeted to cost about $50 million, some of which has been privately raised. In design, it looks like the Vietnam Memorial in the middle of nowhere. No doubt it was a flush Congress that authorized the expenditure, even though the temporary memorial, a simple American flag at the crash site and a makeshift observation deck, looks like a better use of government resources. (Think of American tragedies remembered only with a statue in a traffic circle.)

Forty Americans died at Shanksville. The death toll at Johnstown, just up the road, was more than two thousand when in 1889 a dam above the city broke and a wall of water washed over the gritty mill town. The tragedy is recalled in a series of memorials around the Little Conemaugh River Valley, and at a flood museum in Johnstown, which more recently has lost most of its steel production and its jobs.

Not even the local filming of the 1977 movie Slap Shot with Paul Newman could save the economy of Johnstown, now laced with boarded storefronts, although it’s fun in the main square to imagine the presence of Coach Reggie Dunlop and the Hansons (“They brought their fuckin' TOYS with 'em!”).

A morality tale as well as a local disaster, blame for the Johnstown flood falls on The South Fork Fishing & Hunting Club, a mountain retreat of the super rich — Carnegie and Frick were members — that callously ignored warning signs that its South Fork Dam might give out. No wonder its so hard to win as a Republican in central Pennsylvania.

I spent the night in Pittsburgh, no longer a steel city, but one given over to the service economy: in this case, sports stadiums, universities, finance, and hospitals. Old America made steel rails; new America entertains the masses.

I left Pittsburgh on the The Pennsylvanian, Amtrak’s daily service to Philadelphia and New York, a remnant of the Pennsylvania Railroad, once the largest corporation on earth. After the Pennsylvania Railroad merged with the New York Central in 1968, the combined company failed less than three years later. The writer L.J. Davis said “it was more a death watch than a merger.” Penn-Central was the Enron of the 1970s. When it failed, it was the biggest bankruptcy in U.S. history.

Here’s an overlooked cautionary tale about the delayed time reactions of government’s economic interventions: played out over thirty years, the Penn-Central merger was a big success. It took, however, the deregulation of the freight railroad business and the sale of the assets of Conrail (the successor to the bankruptcy) to the Norfolk Southern and CSX. When the dust settled, Penn-Central left the Northeast with two privately-owned railroads that are everything the shareholders had hoped for in 1968.

On my return trip east, the train crossed the Allegheny Mountains on the Horseshoe Curve, ambled through Altoona and Lewistown, and then paused for almost forty-five minutes in Harrisburg and Philadelphia—an odd schedule for a railroad now talking up high-speed rail. Keep in mind that all the rail stimulus billions will bring is a return to the train speeds reached in the 1920s… the perfect metaphor for the illusions of government investment.

What makes me hopeful about Pennsylvania’s future? I see optimism in the Amish red barns, the three rivers in Pittsburgh, the endurance of Johnstown, the four tracks of the main line, the federal-era houses in Harrisburg, the life of the Susquehanna, and the roadside markers like one in Chambersburg that reads: “On June 26, 1863, Gen. Robert E. Lee, and staff, entered this square.”

What’s not to admire about a state that keeps its history so alive? I only wish it still had a steel industry and the Broadway Limited.

Flickr Photo by Runner Jenny: 155th Pennsylvania Zouave Monument, Little Round Top, Gettysburg.

Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year's BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper's Magazine. He lives in Switzerland.